Tuesday, 26 February 2013

Questions (188, 189)

Pearse Doherty

Question:

188. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 60 of 13 February 2013, the reason only €123m of €323m of deposits in Irish Bank Resolution Corporation on 31 January 2013 are at risk of loss. [9746/13]

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Pearse Doherty

Question:

189. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question 60 of 13 February 2013, if he will outline the types of deposit that comprise the €123m of deposits that are at risk of loss, and if any Irish credit unions are amongst the depositors whose deposits are at risk. [9747/13]

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Written answers (Question to Finance)

I propose to take Questions Nos. 188 and 189 together.

I have been advised that the previous PQ No. 60 of 13 February 2013 does not refer to only €123m of €323m of deposits being at risk of loss. It refers to €123m as being the estimated level of deposits eligible under Deposit Guarantee Scheme (DGS). The remaining deposits are considered as ineligible under DGS; a portion of these deposits will be covered by the Eligible Liabilities Guarantee (ELG) Scheme. As payments under the ELG Scheme are on the basis of claims submitted to the NTMA as operators of the Scheme it is too early for me to confirm how much will eventually be paid out under the Scheme as a result of the liquidation.

In relation to Irish Credit Unions, I am advised by the Central Bank of Ireland that certain tracker bonds sold to Credit Unions which were liabilities of IBRC at the time of the liquidation have a structured deposit element which is covered by the Deposit Guarantee Scheme but fall outside the eligibility criteria for the ELG Scheme due to the nature of the investment product concerned. Unfortunately, if a deposit is not eligible under the ELG scheme the depositor will rank as an unsecured creditor in the liquidation. I am advised that this may impact a small number of Credit Unions.

The individual Credit Unions affected and the Irish League of Credit Unions have been in contact with the Special Liquidator in relation to this matter. It should be noted that the Government has already provided €500 million of taxpayers’ money to support the stability of credit unions through resolution and restructuring. In addition, the Credit Union movement has its own stabilisation fund.